Here’s how much a $10,000 brokerage account could grow by 2050

Many people hesitate to invest in stocks or stock index funds in an investment account simply because they see money handling as risky. And if we’re talking about a period of a few months or even a few years, there’s a solid argument that this is true.

On the other hand, you might be surprised at how predictable stock market performance can be over a multi-decade period. While there is no way to know precisely We can certainly use what will happen in the next ten, twenty or thirty years as a guideline. With that in mind, here’s how much a $10,000 investment in a standard S&P 500 index fund could grow by mid-century.

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Historical stock performance

The S&P 500 index is widely considered the best overall gauge of how the U.S. stock market is performing. And in short periods it can be quite volatile. Since 1965, the S&P 500 has gained as much as 37.6% or lost as much as 37% in a single year. During the Great Recession of 2007-2009, the index lost more than 50% of its value before hitting a bottom.

Over the long term, however, the S&P 500’s returns are surprisingly predictable. Exact performance depends on the specific time period you’re looking at, but over most multi-decade periods, the S&P 500 has returned about 10% annually. Taking the period ‘since 1965’ as an example, the S&P 500 has returned an average of 10.2% per year between 1965 and the end of 2023.

How much could $10,000 grow in 2050?

For simplicity’s sake, let’s say the S&P 500 delivered an annualized return of 10% over the next few decades. Of course, returns will be higher in some years and (much) lower in others, but we are talking about the long-term average.

Since it’s almost 2025, we’re assuming a 25-year period until 2050. So if we take a $10,000 investment and compound it to a 10% annualized return over 25 years, you’d end up with well over €108,000.

Again, this is simply based on historical performance, which is no guarantee of future results. In other words, the actual return of the S&P 500 between now and 2025 is unlikely to be the same as precisely 10% on an annual basis. But the point is that over longer periods of time, the stock market has the ability to turn relatively small investments into much larger sums of money.

Take it one step further

Of course, this is what can happen if you have one one-time Invested $10,000 in an S&P 500 index fund through a broker or investment app and just left it alone.

Now imagine if you did this, but also added a few thousand dollars to your investment each year and allowed it to grow over time. If you were to invest $10,000 in an S&P 500 index fund today and add $500 per month to your investment through 2050, you would end up with a savings pot of almost $700,000, based on a 10% annualized return.

If you’ve ever heard someone say that the stock market outperforms all other major asset classes over time, that’s true. It’s not likely to grow in a straight line over time, but if you invest consistently and let your investments grow over a long period of time, chances are you’ll end up with a lot more money than you started with.